With demise of Big Stone II, the days of King Coal are over for now

Monday's announcement that the giant Big Stone II plant won't be built as planned near Minnesota's western border makes it unlikely that another coal-fired power plant will be built in the Upper Midwest anytime soon, if ever.

Major changes in the economics of producing electricity together with concern over carbon's role in climate change have relegated coal, the fuel that powered the industrial revolution and helped modernize Western civilization, to undesirable status.

The new fuel of choice for large base-load plants is natural gas, which less than three years ago was considered in serious decline but has gained important attention with announcements that new technology will free gas trapped in over thousands of square miles of shale rock in the south, Midwest, and northeastern United States.

But after nearly five years of expensive wrangling over the wisdom of erecting a $1.8 billion, 550-megawatt coal burner near Milbank, S.D., Big Stone II was clicked off by the very utilities that pushed it hard in three states and Washington, D.C.

Financial claims evaporatedIn the end, claims by a five-utility consortium backing Big Stone II that coal was the least-cost alternative evaporated just as the Minnesota Center for Environmental Advocacy (MCEA) said all along that they would.

"This project didn't make financial sense," said Beth Goodpaster, MCEA's lead intervening attorney. She said anticipated construction costs and forecasts for future cost of carbon taxes were both too low, adding up to a high financial risk for shareholders.

According to the utilities themselves, the risk has grown with a decline in demand resulting from the economic recession coupled with uncertainty over climate change legislation in Congress.

In an outstanding article in today's St. Paul Pioneer Press by Leslie Brooks Susukamo, Bob Schulte of the Central Minnesota Municipal Power Agency, a partner in Big Stone II, is quoted as saying: "When you're asking the bank for $2 billion, they want to make sure about the costs of the project; there's a lot of uncertainty out there for long-term energy projects."

Signs of trouble two years agoFirst signs of trouble for Big Stone II came two years ago when Great River Energy of Maple Grove abruptly withdrew as a partner in the project, citing lowering energy demand.

However, Big Stone II backers, led by Otter Tail Power of Fergus Falls, Minn., and Montana-Dakota Power of Bismark, N.D., pushed ahead and won approvals from the North Dakota Public Service Commission, the South Dakota Board of Minerals and Environment, and earlier this year from the Minnesota Public Utilities Commission (PUC) for transmission lines to carry nearly half the power into Minnesota.

The PUC's action was curious, with all five commissioners voting to approve the lines even though two administrative law judges and the Minnesota Department of Energy Security recommended against. Even a consultant hired by the PUC raised major doubts about cost assumptions for Big Stone II advanced by the utilities.

Big Stone II was further crippled earlier this year when the U.S. Environmental Protection Agency announced that it was revoking air quality permits issued by South Dakota.

Otter Tail's withdrawalBut a stake was driven into the project's heart in September when Otter Tail Power surprisingly withdrew from the project, citing lowered electrical demand and the uncertainty of climate and energy legislation in Congress. Otter Tail was to take a third or more of the power from Big Stone II, but it was also the project's lead backer and it even owned the land where the new plant would be built — next to Otter Tail's existing plant, Big Stone I.

Without doubt, the uncertainties of soft electrical demand and the prospect of some kind of carbon tax on coal together with the forever-rising construction costs left the utilities with banks and shareholders chary about financial risk of big coal projects.

But the utilities insist that demand for power hasn't gone away.

Mark Hanson of Montana-Dakota Power in Bismarck said his company is looking into options; Cris Kling of Otter Tail Power said the same thing.

The options? Here's where the utilities are beginning to sound like environmental and energy advocates who've long warned about the folly of relying on coal for power generation.

Looking to natural gasFor reliable base-load power to serve the broad power demand by consumers, utilities are looking to natural gas. At least for the near term, supplies are expected to be plentiful due to a new technology to free gas from tight bubbles in shale rock.

But it would be a mistake to over-rely on natural gas, said Michael Nobel of St. Paul-based Fresh Energy.

(The challenges of natural gas production, along with a splendid overview of energy production, appeared last August in TIME magazine.)

Noble said the wise course would be to turn to natural gas, which is significantly cleaner than coal or oil, for perhaps 20 or 30 percent of future demand, and address the remainder with renewables like wind and solar, and also with energy conservation and improved efficiency.

And that is exactly what utilities are doing. All are looking to wind power (North Dakota is rated one of the nation's highest sources for wind generation), and energy efficiency is being pushed through national and state regulation, and even by developers of new buildings or retrofitting older buildings to reduce energy consumption.

What it adds up to is that the days of King Coal to fuel power plants are over for now, at least until technology is developed to capture carbon and keep it from the atmosphere, where it promotes climate change.

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Comments (16)

Submitted by david granneman on November 3, 2009 - 11:59am.

hello all
it looks like the environmentalist have shot us in the foot again. big stone II would have provided southern and western minnesota with cheap, reliable energy for our future growth and prosperity. instead we are being forced to look to alternative energy sources which are very expensive, and worse yet unreliable and unproven.
china is building coal powered electric plants as fast as they can. this will ensure they cheap reliable electricity for thier future growth and prosperity. the sad fact is we are killing our economy for a hoax. there is no global warming. the earth has been cooling for the last decade. there is no need to limit our use of fossil fuels. which country do you think has a brite future with a growing economy and jobs - the us with high cost and unreliable energy or china with low cost, plentiful, and reliable energy.

GLOBAL WARMING IS A HOAX PERPETUATED BY PEOPLE GETTING RICH BY DESTROYING OUR PROSPERITY AND WAY OF LIFE.

Instead of replacing coal with natural gas as a source of energy for making electricity, why not consider methane? If every single sewage treatment plant, every large feedlot and every landfill had an anaerobic digester or methane recovery system, we could use the methane to power our turbines, just like natural gas. That would save the atmosphere from a gas that is over 20 times worse than carbon dioxide as a greenhouse gas. It would complement perfectly with exiting and new wind turbines, since you can crank it up quickly when the wind dies down. And it is completely renewable, as long as we keep producing sewage and food wastes. Win/win/win.

do you think taking money out of YOUR pocket and putting it in AL GORE'S POCKET can save the planet?
Al Gore could become world's first carbon billionaire
Al Gore, the former US vice president, could become the world's first carbon billionaire after investing heavily in green energy companies.

Natural gas still produces about half the emissions of coal. We need to focus on conservation, efficiency, hydro, wind, solar and biomass.

BENSALEM, Pa., U.S. 9/22/09 (PennWell) -- Hydropower capacity in the United States could be doubled with minimal impact to the environment, U.S. Energy Secretary Steven Chu said during a recent White House forum in Pennsylvania.

Chu said the industry could add 70,000 megawatts of capacity by installing more efficient turbines at existing dams, increasing the use of pumped-storage projects, and encouraging the use of run-of-the-river turbines.

Mr Granneman's two comments are really sad based on the fact that even Dustin (Dusty) Johnson, chair of the South Dakota PUC admitted before the Boxer/Inhofe committee last week, that things have changed quite a bit since Big Stone II was approved by the South Dakota PUC. He certainly does not think that global warming is a hoax and said as much in his conclusion. Quoting Mr Johnson, "I don’t want anyone to think that these comments are coming from a caveman or Neanderthal. I believe the globe is warming, and I believe we should reduce our
carbon footprint."

Sadder still is the fact that Bill Gates, the founder of Microsoft and an avowed environmentalist, is also a shareholder in Ottertail through Cascade investments and has just increased his coal footprint with Optim Energy, LLC, which includes the 305 MW lignite-fired power plant Twin Oaks 160 miles northwest of Houston.

A commentary in the StarTrib this morning had a commentary, "Can't Believe the news? Or don't want to." I think this "willful disbelief," as the article calls it, must apply to people like the guy who said global warming is a hoax etc.
It's the only explanation I can come up with for people who presented with incontrovertible facts, still denies them. As the article points out, it's too uncomfortable to admit the facts and be forced to change.
It's probably not worth responding to these people. They don't want to change their mind and they will not--obviously--listen to evidence, facts, and even the events already happening around us.

U.S. Senate Minority Report Update: More Than 650 International Scientists Dissent Over Man-Made Global Warming Claims
December 11, 2008

U. S. Senate Minority Report:

More Than 650 International Scientists Dissent Over Man-Made Global Warming Claims

INTRODUCTION:
Over 650 dissenting scientists from around the globe challenged man-made global warming claims made by the United Nations Intergovernemntal Panel on Climate Change (IPCC) and former Vice President Al Gore. This new 231-page U.S. Senate Minority Report report -- updated from 2007’s groundbreaking report of over 400 scientists who voiced skepticism about the so-called global warming “consensus” -- features the skeptical voices of over 650 prominent international scientists, including many current and former UN IPCC scientists, who have now turned against the UN IPCC. This updated report includes an additional 250 (and growing) scientists and climate researchers since the initial release in December 2007. The over 650 dissenting scientists are more than 12 times the number of UN scientists (52) who authored the media-hyped IPCC 2007 Summary for Policymakers.

I'm not going to fence with Deniers because, as Ginny & the Strib opinion piece pointed out, their "willful disbelief" is immune to logic and objective fact.

I'm bemused, though, at the claims of "hoax" with regard to global warming. I don't know how anyone can honestly believe that the entire world community of climatologists, most of whom are not even American, are engaged in a gigantic hoax - and for what? What exactly do the Deniers think the climatologists get out of perpetrating a hoax? One can only conclude that the Deniers simply do not understand how science works - in particular, the peer review process, which is the best tool we have for winnowing out the false and illuminating the true.

I'll say this: if it's a hoax, the hoaxers have done one hell of a job, you know, making the glaciers and icecaps disappear (where are they hiding all the ice?)

It's also entertaining to analyze the language used by the Deniers. For example, they always cite X number of unnamed "scientists", not "climatologists". I guess if, say, a chemist (or even a statistician like that Lomborg fellow) chooses to gainsay the findings of climatology, well, he obviously trumps the people who actually study climate, because after all, he's a "scientist" (wasn't there a tv personality back in the 50's or 60's who used the tagline "he has a degree in Science!"?) They also like to cite certain meteorologists, apparently not comprehending the difference between weather and climate. And, of course, they cherry-pick data points, conveniently ignoring the rest of the data pool, to claim that the Earth is really cooling, not warming (again, I wonder, where are they hiding all the ice?)

What this is, really, is the anti-intellectual, anti-science mindset that welled up on the Right during the Bush years, coupled with a fear of potentially having to compromise on a self-indulgent lifestyle. Fortunately, the truth will out, and the scientific method is not influenced by talk radio personalities, Republican politics, or strident postings in the comment section of web sites.

One thing is clear, though: we need to do a much better job of educating our kids in the basics of science and how the universe operates.

What can you say to those that listen to their local chamber of commerce that says that the price of energy is going to determine their future and not how competitive the are in other regards?

The trouble with climate science is that it is complex. But I'm not sure that the scientific complexity is the key issue. I think what here in the United States has happened, is that the issue has been divided along party lines. The republicans hark back to an earlier America where the car rides supreme and the resources are there to be burned and we have lots of them and so forth.

The democrats have a more nuanced view of the world and it's no accident they produced Al Gore and the republicans produced George Bush.

But when you get to that point of political commitment, facts don't really matter so much anymore. People have their views determined by ideology and that's just a tragedy that its happened in this country. It hasn't happened elsewhere. In Britain the conservatives, the Tories are probably more green than Labor, which is the socialist party.

Conservatism doesn't have to go with the rejection of environmental values. But unfortunately in this country the republicans have seemed to taken that view. I am always hopeful that conservative voices will rediscover a love of country and will take on an environmental ethic along with the other aspects of the conservative ideology. Unfortunately there is not much sign of that at the moment.

hello mr groth
your said
"I'm not going to fence with Deniers because, as Ginny & the Strib opinion piece pointed out, their "willful disbelief" is immune to logic and objective fact."
the reason you do not want to fense with the "willful disbelievers" is because you have no evidence to back up your claims. i have presented evidence to back up my positions. instead of debating the SCIENCE, you would rather resort to name calling and charactor assasination.

The Nongovernmental International Panel on Climate Change (NIPCC) has issued a rebuttal to the United Nation's International Panel on Climate Change. The report challenges the theory that man somehow has played a major role in changing the global climate, and also challenges the need to adopt painful and costly measures to combat this perceived threat.
Where many in the AGW community would have you believe that there is a consensus over global warming theory, the reports showcases the ongoing debate on the topic and support for alternative theories. Over 31,478 American scientists signed a petition in the appendix citing “there is no convincing scientific evidence that human release of carbon dioxide, methane, or other greenhouse gases is causing or will, in the foreseeable future, cause catastrophic heating of the Earth’s atmosphere and disruption of the Earth’s climate."

First, methane is natural gas, making up about 90% of it.
Second, the earth is not cooling. This is the warmest decade since records have been kept. 1998 and 2005 are the warmest years because of El Nino.
Third, wind has no chance to replace base load power which comes from coal and nuclear, and which could come from combined cycle gas plants. Texas has by far the most wind power(8,000+MW) and it provides 1% of Texas electric grid power.
Fourth. Minnpost is a fine newspaper, but its technical articles are weak on technology.